CMS Awards Region C Contract to Cigna

WASHINGTON–After nearly a year-long battle with CMS, Cigna
Government Services has been named the new DME Medicare
Administrative Contractor for Region C.

Beginning April 1, 2007, Cigna will be responsible for Medicare
DME claims administration for Alabama, Arkansas, Colorado, Florida,
Georgia, Louisiana, Mississippi, New Mexico, North Carolina,
Oklahoma, Puerto Rico, South Carolina, Tennessee, Texas, U.S.
Virgin Islands, Virginia and West Virginia. Approximately 13.4
million Medicare beneficiaries reside in the jurisdiction.

In January, CMS originally had announced that Palmetto GBA would
become the new Region C DME MAC, but Cigna protested that decision,
as well CMS’ award of the Region D contract to Noridian, triggering
an automatic stay of the contract awards for 100 days (see HomeCare Monday, April 17).

In May, the Government Accountability Office denied Cigna’s
protest for Region D but upheld its protest of the Region C award,
requiring CMS to reopen discussions with potential contractors (see
HomeCare Monday, May 15).

According to CMS, after evaluating the final revised proposals
from both contenders, it found the proposal from Cigna “offered the
best overall value to the government” and ruled in its favor on
Sept. 28. The contract includes a base period and four one-year
options valued at approximately $144 million. Palmetto will
continue to handle Region C work until Cigna is able to take over,
and also will continue to operate the National Supplier
Clearinghouse (NSC) and as the Statistical Analysis Durable Medical
Equipment Regional Contractor (SADMERC).

As part of CMS’ administrative contracting reform, the new DME
MACs handle billing, customer service and other day-to-day
operations. The transition from the DMERCs to the MACs took place
as scheduled on July 1 for Regions A and B, awarded to The National
Heritage Insurance and AdminaStar Federal, respectively. Noridian
became the new Region D contractor on Oct. 1.

Separate DME Program Safeguard Contractors, which assumed duties
earlier this year, handle benefit integrity, medical review and
medical policy for each region.

For a question and answer document about the changes, click here.